Related topics

Ford Argentina To Cut Production

September 18, 1998

BUENOS AIRES, Argentina (AP) _ Ford Motor Co.’s Argentine unit beginning Monday will cut production for the ``foreseeable future,″ a company official said.

``We’re reducing production and suspending 1,400 workers on full pay until market conditions improve,″ Ford Argentina Institutional Relations Director Rodolfo Ceretti said Friday.

The cuts at Ford’s General Pacheco plant north of Buenos Aires come as a result of a 15 percent decline in sales to the domestic market and about 35 percent less demand from Brazil, Ceretti said.

He said Ford would cut production of its Escort model from 489 units daily to 300 units assembled in one shift, instead of the current two.

The suspensions begin Monday and run until the plant shuts down for the Christmas period _ Dec. 14 to Jan. 4 _ and then will continue until ``sales pick up again,″ said Ceretti.

He said the suspension of 1,400 employees from a work force of 3,570 would cost Ford an estimated $1 million per month in salaries.

``It’s a lot of money, but if you consider how much we would have to pay in indemnities if we fire them, it’s a much cheaper option,″ said Ceretti. But he added, ``If market conditions deepen, firing might become an option.″

Under Argentine labor laws, a company must pay each dismissed worker one month’s salary for each year of employment.

As reported, Ford in September suspended production of its Escort line for four days as a result of weakened demand since the start of Asia’s financial crisis and its effect on Brazil. That suspension affected 2,000 workers.

Ford’s latest move to cut production comes on the heels of a similar announcement Tuesday by Italian auto maker Fiat’s local unit that closed its plant in the central province of Cordoba for the fourth time since July.

Also, the local unit of French car maker Renault said Wednesday it plans to halt production at its plant in Cordoba for three days.

Update hourly